INSTANT VIEW: Australian parliament rejects carbon trade plan

SYDNEY (Reuters) - Australia's parliament rejected on Thursday a government plan for the world's most ambitious emissions trade regime, bringing the nation closer to a snap election.

KEY POINTS

* The Carbon Pollution Reduction Scheme was set to start on 1 July, 2011. Under the scheme, about 1,000 of Australia's biggest polluting companies would have had to purchase carbon permits, covering 75 percent of national emissions.

* The government is committed to an unconditional emissions cut of 5 percent by 2020.

COMMENTARY

FRANK JOTZO, DEPUTY DIRECTOR CLIMATE CHANGE INSTITUTE,

AUSTRALIAN NATIONAL UNIVERSITY

"Today's vote may look like a setback for climate policy, but actually it is a step along the way toward comprehensive emissions control policies in Australia.

"The government's scheme certainly has its flaws, and the hope is that it will be improved rather than watered down before the Senate votes on it again later in the year.

"For the Copenhagen negotiations, it would be helpful if Australia has domestic legislation in place before December. It would send a positive signal, and help Australia take a leadership role.

"Helping lead the global effort is important, because among developed countries Australia has the most to lose from climate change.

CARL MCCAMISH, EXECUTIVE GENERAL MANAGER OF POLICY AND

SUSTAINABILITY, ORIGIN ENERGY

"We believe an emissions trading scheme should be the central policy mechanism to guide the investments and behavioral changes required to address the long term challenge of climate change.

"We remain convinced the CPRS legislation provides the framework for a good, workable scheme. It is sufficiently flexible to adjust over time to ongoing developments in the science of climate change and in the international negotiations around Copenhagen and beyond. It puts in place a range of measures to make the adjustment smooth."

GREG BOURNE, CHIEF EXECUTIVE, WWF-AUSTRALIA

"The failure of this legislation has left the world in a more vulnerable position. We are all aware that climate change is an urgent problem which needs an urgent solution.

"Polling continues to show that Australians want leadership on this issue. It is a travesty that our parliament can't delivery the certainty which communities, business and other nations are looking for as we move toward a global deal in Copenhagen.

"WWF looks forward to the legislation being brought back to parliament at the earliest possible opportunity."

JULIE TOTH, SENIOR ECONOMIST, ANZ ECONOMICS AND MARKETS

RESEARCH

"The Senate's decision to vote down the government's proposed CPRS scheme is no surprise. Of more concern to future negotiations, the range of reasons for opposition to the scheme (within the Senate) is so wide as to make meaningful responses to all objections almost impossible.

"In the meantime, Australian businesses are to be left stranded in yet another (undefined) period of uncertainty regarding the costs, opportunities, timing and other essential details of carbon trading in Australia.

"This is becoming especially problematic for the energy sector, which is now long overdue for some expensive heavy infrastructure investment that can only be postponed for so long."

CHRIS HALLIWELL, SENIOR BROKER, CARBON AND RENEWABLES, TFS

GREEN

"The filibustering of this bill is getting elaborate. We can all appreciate there is a political agenda at play, which requires this process. But politics for politics sake on this issue seems to be getting very obstructive.

"Changes and possible improvements to the scheme design can be amended once the legislation is in play if required.

"From an industry point of view there has been a great deal of resources invested into getting this far -- we need a regulatory progression."

MARTIJN WILDER, HEAD OF GLOBAL CLIMATE CHANGE AND EMISSIONS

TRADING PRACTICE, BAKER & MCKENZIE

"The failure of the Senate to pass the CPRS legislation simply creates more business uncertainty and delays the inevitable passing of the CPRS for no real reason other than what the opposition perceive as short term political gain.

"It is critical that Australia moves forward with an emissions trading regime policy before Copenhagen that demonstrates a clear commitment to tackling climate change.

"Despite having had many months to bring forward changes to the scheme the opposition has failed to offer any real alternative to the CPRS -- which is the scheme they were advocating in the run up to the last election."

(Compiled by Canberra and Sydney bureaux and David Fogarty in Singapore)